RISMEDIA, Nov. 25, 2008-Existing-home sales declined on the heels of a strong gain in September as uncertainty and economic concerns increased in October, according to the National Association of Realtors®.
Existing-home sales-including single-family, townhomes, condominiums and co-ops-fell 3.1% to a seasonally adjusted annual rate of 4.98 million units in October from a downwardly revised pace of 5.14 million in September, and are 1.6% below the 5.06 million-unit level in October 2007.
Lawrence Yun, NAR chief economist, said consumer hesitation is understandable.
“Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” he said. “We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.”
Total housing inventory at the end of October slipped 0.9% to 4.23 million existing homes available for sale, which represents a 10.2-month supply at the current sales pace, up from a 10.0-month supply in September.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.20% in October from 6.04% in September; the rate was 6.38% in October 2007. “Mortgage interest rates have been moving up and down in a historically low range, with the fixed rate down to 6.04 percent last week,” Yun noted.
Even with the overall decline, Yun identified a number of areas with solid sales gains from a year ago, including many California and Florida markets, as seen previously, as well as Boston, Minneapolis, and Denver.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the need for professional assistance is growing. “Navigating the transaction process is easier said than done without professional assistance in today’s market,” McMillan said. “Proper valuation when many homes are being sold below replacement construction costs is very challenging – buyers remain in the driver’s seat.”
The national median existing-home price for all housing types was $183,300 in October, down 11.3% from a year ago when the median was $206,700. There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices; the median is where half of the homes sold for more and half sold for less.
Single-family home sales declined 3.3% to a seasonally adjusted annual rate of 4.43 million in October from a level of 4.58 million in September, but are unchanged from a 4.43 million-unit pace in October 2007. The median existing single-family home price was $181,800 in October, down 11.2% from a year ago.
Existing condominium and co-op sales eased by 1.8% to a seasonally adjusted annual rate of 550,000 units in October from 560,000 in September, and are 12.0% below the 625,000-unit pace a year ago. The median existing condo price was $193,000 in October, which is 13.0% below October 2007.
Regionally, existing-home sales in the Northeast slipped 1.2% to an annual pace of 830,000 in October, and are 9.8% lower than a year ago. The median price in the Northeast was $241,700, down 9.8% from October 2007.
Existing-home sales in the West eased by 1.6% to an annual rate of 1.21 million in October but are 37.5% higher than October 2007. The median price in the West was $231,400, down 27.0% from a year ago.
In the South, existing-home sales declined 3.2% to an annual pace of 1.84 million in October, and are 10.2% below a year ago. The median price in the South was $161,100, which is 5.8% lower than October 2007.
Existing-home sales in the Midwest fell 6.0% in October to a pace of 1.10 million and remain 9.1% below October 2007. The median price in the Midwest was $149,400, down 6.7% from a year ago.
References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
For more information visit: www.realtor.org/research/research/ehsdata.